Construction Of Cpix Data For Forecasting And Modelling In South Africa
South Africa adopted inflation targeting in 2000, targeting the consumer price index (CPI) excluding mortgage interest cost (or CPIX), for “metropolitan and urban areas”. However, no clear technical account of the methodology of construction of CPI and CPIX is available from Statistics South Africa, as published by reputable government statistical agencies in other countries. We aim to enhance transparency by explaining the methodology as we understand it, and to encourage the official publication of a technical handbook of CPI methodology. We provide evidence that the CPIX data published by Statistics South Africa uses a methodology inconsistent with their construction of the CPI data. As a result, annual increases in CPIX were overstated by as much as one percent at the end of 2001 and in January, 2002; and understated by a similar amount in November, 2003 to January, 2004. Further, while the CPIX (`metropolitan and urban areas`) measure only became relevant to monetary policy setting and wage contracts from 2000, and is published monthly only from 1997, a far longer time series is required for the forecasting and modelling exercises of the South African Reserve Bank (SARB) and others. We produce estimates of CPIX (`metropolitan and urban areas`) back to 1997, and CPIX (`metropolitan areas`) back to 1970, on a consistent methodology, using monthly price indices, the appropriate weights, and linking correctly when rebasing Both measures differ from those published by Statistics South Africa (published back to 1994 only in the latter case). They also differ significantly from internal SARB quarterly estimates of historical CPIX data, used by SARB modellers and the International Monetary Fund.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 72 (2004)
Issue (Month): 5 (December)
|Contact details of provider:|| Postal: PO Box 929, 0001 Pretoria|
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0038-2280
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0038-2280|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ashok Bhundia, 2002. "An Empirical Investigation of Exchange Rate Pass-Through in South Africa," IMF Working Papers 02/165, International Monetary Fund.
- Janine Aron & John Muellbauer & Coen Pretorius, 2004.
"A Framework for Forecasting the Components of the Consumer Price Index: application to South Africa,"
CSAE Working Paper Series
2004-07, Centre for the Study of African Economies, University of Oxford.
- Janine Aron & John Muellbauer & Coen Pretorius, 2004. "A Framework for Forecasting the Components of the Consumer Price Index: application to South Africa," Economics Series Working Papers WPS/2004-07, University of Oxford, Department of Economics.
- Janine Aron & John Muellbauer, 2002.
"Interest Rate Effects on Output: Evidence from a GDP Forecasting Model for South Africa,"
Economics Series Working Papers
WPS/2002-04, University of Oxford, Department of Economics.
- Janine Aron & John Muellbauer, 2002. "Interest Rate Effects on Output: Evidence from a GDP Forecasting Model for South Africa," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 185-213.
- Aron, Janine & Muellbauer, John, 2002. "Interest Rate Effects on Output: Evidence from a GDP Forecasting Model for South Africa," CEPR Discussion Papers 3595, C.E.P.R. Discussion Papers.
- Janine Aron & John Muellbauer, 2002. "Interest rate effects on output: evidence from a GDP forecasting model for South Africa," CSAE Working Paper Series 2002-04, Centre for the Study of African Economies, University of Oxford.
- Robert J. Gordon, 2000. "The Boskin Commission Report and its Aftermath," NBER Working Papers 7759, National Bureau of Economic Research, Inc.
- Janine Aron & John Muellbauer & Coen Pretorius, 2004. "A Framework for Forecasting the Components of the Consumer Price," Development and Comp Systems 0409054, EconWPA.
- repec:ucp:bknber:9780226304557 is not listed on IDEAS
- Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
When requesting a correction, please mention this item's handle: RePEc:bla:sajeco:v:72:y:2004:i:5:p:884-912. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.